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by JonathanBeuys
1309 days ago
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I think what you described is leverage. You own an asset worth $100. You give away your asset as collateral to borrow $90. You buy more of that asset for $90. You give away your asset as collateral to borrow $80. You buy more of that asset for $80. Now, if the asset goes up/down in value, you earn/loose as much as if you invested $270 into that asset. Even though you only invested $100. The downside is that you have to pay fees to the lending service. And that you are exposed to counterparty risk. |
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